Driven by rising customer expectations - and the potential for operations to provide competitive differentiation - COOs are seeing their responsibilities expand beyond cost saving and efficiency to include a growing role in raising revenues. Through in-depth interviews with operations executives across a range of industries and geographies, the IBM Center for Applied Insights explores how COOs are transforming processes to provide customers with faster, simpler and more relevant experiences. In their own words, operations leaders share the opportunities and challenges they're encountering as they guide their organizations toward more customer-centric ways of working.

1. Shubham Jain, Vijay Pandiarajan, Connie Blauwkamp
September, 2013
Driving growth through serving empowered customers
The need for an enhanced customer experience
© 2013 IBM Corporation

2. Executive Summary
To differentiate, COOs need to serve a customer experience that is
relevant, consistent everywhere, and served in near real time
 In an age of empowered, digitally savvy customers, the COOs are being called
upon to help drive top-line growth for their organizations
 To do so, COOs must instill customer-centricity within the organization as a way to
differentiate in the marketplace.
 While efficiency has a critical role to play in achieving a great customer
experience, it is not always enough.
 COOs must transform processes to provide a simple and flawless customer
experience by serving individual customers across diverse markets. The customer
experience should be relevant, consistent everywhere, and served in near real
time
 Many COOs are using emerging technologies, such as mobile, analytics, social,
cloud and intelligent business automation, to help drive this reinvention.
Note: Methodology consisted of 60-minute in-depth telephone interviews with 50 senior Operations executives in selected countries and industries.
Country coverage: US, UK, DE, CN, AU, BR; Industry coverage: Healthcare, Banking/Financial Services, Insurance, Energy/Utilities,
Travel/Transportation, Telco, plus a small portion (~20%) from other industries; Company size: Primarily Large Enterprises (1000+ employees) (85%);
upper Mid-Market (500-999 employees) (~15%)
Throughout the study, use of the term ‘COO’ refers to senior operations leaders, for example, Senior Vice President of Operations, General Manager of
Operations, Chief Operations Officer, Director of Operations, Head of Operations etc.
2
Source: IBM Center for Applied Insights
© 2013 IBM Corporation

3. Findings
Customers are demanding better experiences. The C-suite knows a
superior customer experience is key to driving top-line growth
 80% of consumers are more likely to recommend a brand because it provides a simpler
experience1
 99% of CIOs with mandates to transform the business are looking to drive better processes 2
 According to a survey of more than 1,700 CEOs, the top leadership trait needed in this period
of rapid, disruptive change is customer obsession.3
Much of this process transformation is falling on the shoulders of the COO. The COO is
increasingly involved in driving strategic initiatives to meet the top-line growth objectives
“In our industry, clients are becoming far more interested in operations. They want to
know how things work - not just our investment management style. How we operate is
increasingly fundamental to top-line growth.” - Head of Operations, UK, Financial Markets
“The perception of Operations has changed pretty significantly over the past few years.
Historically, it was oriented around bottom-line efficiencies. Now, when there's an
executive-level discussion about increasing top-line revenue, Operations is always at the
table.”- Director of Operations, UK, Financial Markets
3
Sources: 1)Global Brand Simplicity Index, 2012, Siegel and Gale; 2)IBM Global CIO study, 2011; 3)IBM Global CEO study, 2012
Source: IBM Center for Applied Insights
© 2013 IBM Corporation

4. Findings
For example, in the Financial Markets industry, COOs are increasingly
involved in strategic initiatives to meet top-line growth objectives
Insights from a financial markets Operating Model Evolution study
 The COO is increasingly involved in strategic initiatives to meet top-line growth objectives
– 62% of operations leaders believe the COO is becoming a true business partner in
driving strategic change
– 58% of operations leaders strongly agree that the COO is driving benefits beyond cost
savings
 The quality of a firm’s operations staff is also critically important
– In organizations where the COO drives change, agility and innovation, 73% agree that
operations staff can differentiate the firm in the minds of their customers
“From an operational perspective, we’re
bringing platforms together and building a
system that can move as quickly as our clients
want to move.”
"The better/more efficient our operations are,
the more customized products can be offered;
this will allow us to differentiate. “
- COO, US
- Operations Vice-President, Broker-Dealer, UK
Note: To understand how operations within financial markets firms are changing, IBM in collaboration with Broadridge
Financial Solutions surveyed 133 operations strategy decision makers across the US, UK, Singapore and Hong Kong in the
year 2012
4
Source: IBM Center for Applied Insights
© 2013 IBM Corporation

5. Findings
To differentiate, it's becoming increasingly critical to understand
individual customers and serve them with great experiences
Differentiating
experiences
“Putting the customer at the center of our
operations is causing a cultural shift. We
used to talk about 'internal' and 'external'
customers, but now we all focus on the
person with the wallet.”
Depends on understanding and
serving individual customers
“We aim for a perfect customer experience,
because it only takes one bad experience to
impact a dozen customers, especially in the
wealth management area.” -US, VP of IT, Financial
Markets, IBM Broadridge Operating Model Evolution Survey
- Manager, Quality Assurance, AU, Financial Markets
“In investment banking, operations can be
a key client service differentiator. Good
architecture, good systems and good
levels of automation enable good client
service - which, in turn, helps generate
revenue further upstream.”
“Consumers are more discerning these
days. They compare hospitals; they don't
just go where they're told. And if they have a
bad experience, they won't come back.”
-COO, US, Healthcare
- Director of Operations, UK, Financial Markets
5
Source: IBM Center for Applied Insights
© 2013 IBM Corporation

6. Findings
Efficiency has a critical role to play in improving the customer
experience, but it is not always enough.
 Customer-centric business
operations can help
achieve much needed topline growth
 Efficiency helps drive
quality and continuous
improvement, but customer
acquisition and retention
are not possible through
efficiency alone
“It’s really a combination of trying to grow business, trying to do it with service excellence
and quality, and trying to reduce costs where you can.” - COO, US, Healthcare
“If you look at only one side of the business - claims or underwriting - or only efficiency or
just processes, there is a danger that you lose the holistic approach.” -COO, Germany, Insurance
6
Source: IBM Center for Applied Insights
© 2013 IBM Corporation

7. Findings
Processes should provide a customer experience that is relevant,
consistent everywhere, and served in near real time
Operations need to simplify the end to end customer experience and deliver customized products
and services across a variety of channels that leverage mobile, social, cloud and big data
7
Source: IBM Center for Applied Insights
© 2013 IBM Corporation

8. Findings
Instant – Processes need higher levels of automation to serve
customers in near real time
• “Occurrence of service issues don't necessarily determine customer loyalty. It’s
how fast and how well you fix the problem.” (Director of Operations, UK, Financial
Markets)
• “Innovation is often about agility and speed. We have clients that want everything
to be confirmed within 20 minutes of trade completion.” (SG, Chief Customer
Officer, Financial Markets, IBM Broadridge Operating Model Evolution Survey)
• “There's a growing recognition among senior management that Operations can
make a significant difference in how we deliver products. For example, streamlining
the consumer loan application and underwriting process means it's faster for
someone to apply, be approved and actually close on a loan.” (Director of
Operations, US, Financial Markets)
8
Source: IBM Center for Applied Insights
© 2013 IBM Corporation

9. Findings
Seamless – Processes, data and systems need better integration to
provide consistent, high-quality experiences across channels
• “We're working to improve the bill and pay component of the customer experience.
Presenting one consistent face to the customer includes producing a single bill,
rather than billing from three or four different systems. Customers also expect
cross-product discounting. But when you don’t bill in a single system, that’s hard to
provide.” (SVP/VP of Operations, US, Telco)
• “Customers expect every company to offer services like Amazon and Google. They
say ‘I want to know where my order is' and 'I want to see my bill in real time,’ which
puts pressure on our systems and operations. Even though we’re in a very
regulated, controlled market, our objective is to provide the same service level as
these companies - because that’s what we get compared with, both by internal staff
and customers.” (Head of IT and Business Solutions, UK, Energy/Utility)
• “Think about how integrated your credit report is - information from various credit
cards, your bank, mortgage, all in one location. It's somewhat shameful that we
can’t do the same thing with your health information - but we're moving in that
direction.” (COO, US, Healthcare)
9
Source: IBM Center for Applied Insights
© 2013 IBM Corporation

10. Findings
Insightful – Processes need analytics-driven insights put in context to
engage individual customers in relevant ways
• “With the right visibility - having the full set of customer information on the screen
in front of us - we could cross sell or provide that customer with the services he's
missing. But we don't have that view right now.” (Manager Quality Assurance, AU,
Financial Markets)
• “Through speech analytics software, we can pick up key themes in the
conversations between our agents and our customers. This provides intelligent
customer feedback we can use.” (Head of Business Services and Strategy, UK,
Energy/Utility)
• “We’re doing quite a lot on big data management at the moment. We are trying to
understand our customer data, its value and where it is, so that we can use it to
serve the customer better.” (Head of IT and Business Solutions, UK, Energy/Utility)
10
Source: IBM Center for Applied Insights
© 2013 IBM Corporation

11. Conclusions
Conclusions and call to action
 COOs and other operations leaders are being challenged by both their organization and by
customers. They are causing an evolution in the role of operations leaders – one that is
focused not only on efficiency, but also on growth and customer-centricity. One that uses a
variety of advanced technologies to provide processes at the speed, quality and the level of
personalization needed for competitive advantage
 Ask yourself the following questions:
– Is the perception of Operations and its responsibilities changing in your organization?
– Is your COO and other operations leaders being called upon to help drive top-line growth by other
members of the C-suite?
– Are your customers expecting and demanding faster, consistent, tailored services? How are you
responding?
– Do you approach efficiency only as a means to an end, or more holistically?
– How customer-centric are your current processes? If they aren’t, why not? If so, do you think they
are customer-centric enough?
– How is your COO and other operations leaders working to enhance the customer experience and
transform the processes that deliver it?
– Are you currently using, or exploring using technologies, such as mobile, analytics, social business,
cloud and intelligent business automation to improve operations?
© 2013 IBM Corporation

12. © 2013 IBM Corporation

13. For more information
Contact
Shubham Jain
Consultant, IBM Center for Applied Insights
shujain3@in.ibm.com
http://www.ibm.com/ibmcai
© 2013 IBM Corporation